We’ve already established that timesheets can be tedious, but we’ve also communicated just how seriously the government takes them. Whether you have a government grant or contract, your timesheets must be in compliance with Federal Acquisition Regulations (FAR). They will be checked during a government award audit, so make sure you do them right.
Once you understand that timesheets will become a part of your day-to-day obligations, you will need to make a decision whether to use manual timesheets or electronic timesheets.
HOW AND WHEN TO USE MANUAL TIME SHEETS FOR FAR COMPLIANCE
As discussed in a prior blog, manual timesheets must be prepared by the employee on a daily basis, in ink, signed, gathered at the end of a payroll period, approved by a supervisor and provided to accounting who will spread the time and costs among the various general ledger accounts and projects. If any changes need to be made they must be done by crossing out the mistake, noting the proper time or job, and initialed by the employee. Written timesheet policies and procedures must be clearly defined and accessible to all employees that are held accountable.
For a very small company, manual timesheets are a viable option. Manual timesheets are certainly cost-effective, and extremely easy to implement – especially since there’s no software to learn. We’ve found that giving one person the role of collecting timesheets aids in on time documentation. To take it a step further, your written policies can include provisions for delay paying the payroll of employees with delinquent timesheets. Such serious consequences reflect the seriousness of maintaining the timesheet – which leads to a compliant accounting system and allows the accounting department to invoice the Government quicker!
HOW AND WHEN TO USE ELECTRONIC TIME SHEETS FOR FAR COMPLIANCE
For businesses with multiple projects and employees, electronic timesheets may be a more viable option. Obviously, an electronic timekeeping system carries an out of pocket cost as well as the time cost of onboarding all employees. For businesses with many employees, multiple projects, and various levels of staffing (especially if they are in different locations), the electronic option may be your best bet. The controls for electronic timesheets are identical to the manual controls noted previously. Effectively, an electronic timesheet needs to create a forensic trail.
In a realistic world, some, if not all employees, will work more than the average 40 hour work week. In this case, a company must account for uncompensated overtime. Electronic timesheet software should be set up to support the uncompensated overtime policy you have implemented for your company.
Depending on the software purchased, an electronic timekeeping system can calculate the labor costs, assign labor categories, be used as part of a project management system, and be linked to your accounting software, such as QuickBooks. This provides better control, accuracy of input, and efficiencies. To learn more about our SBIR and FAR compliant accounting software, Jamesonworx, check out this blog.
If you have any questions about your Federal grant or contract accounting compliance, contact us today.